Which of the following describes when government alter normal market activity?
A. Intervention
B. Unprofitable outcome
C. Innovation
D. Market failure
Answer: A
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
An economic agent ________ when he accounts for the full costs and benefits of his actions
A) is called a free rider B) internalizes an externality C) maximizes his profit D) is called a rent seeker
Explain the relationship between net exports and net foreign investment
What will be an ideal response?
An increase in the personal income tax rate is an example of an expansionary fiscal policy
a. True b. False Indicate whether the statement is true or false